The day was March 1st, 2009. I remember it like it was yesterday. I was a bright eyed and bushy tailed 23y/o with a world to conquer. I put on my brand new navy blue suit from Zara and hopped into my parents two door silver Pontiac Grand Am. On the speakers, “Can’t Tell Me Nothing”, by Kanye West. In my back pocket, a freshly printed real estate licence. It was day one and little did I know that it would be the only job/career I would have for the next nine years of my life.
I am one of the lucky ones. Less than 50% of realtors make it through the first two years, less of them through years 3-5 and only a handful make it to year 10. I have seen friends/colleagues come and go, 5.79% 5 year fixed interest rates drop to 2.79%, a boom then bust then recover condo market and an average sale price in the city go from $303,000 to $392,000 (residential and condominiums combined). What I haven’t seen over the last nine years, is a real estate market this competitive this early into the season. The reason? competitive interest rates, a stable public sector work force and extremely low inventory.
How historically low is the inventory you ask? I would refer you the charts below.
You will notice that while the number of new listings this year is almost 31% less than that of the same period in 2017 and 40% less than 2016, sales volume is almost equal leaving very little carry over as illustrated by the following chart.
Yesterday, I was representing a buyer in a multiple offer situation for a home in Elmvale Acres. We learned that there was 50 plus showings over the week it was listed and from those 50 showings, 10 potential buyers offered on the home, bidding the price up to over $60,000 above the asking price. I predict that this is going to become the new normal.
Fun fact: This home was listed at $419,900. There are currently only 36 homes for sale between $400,000-$500,000 between Woodroffe and the Aviation Parkway and then Heron/Baseline to the river. Remember there was 50 showings for the above home.
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Next week, we will discuss what is causing this lack of inventory.